Measuring quality of life vs. measuring rent

I can’t agree with Matt Kahn’s snark at Santa Monica for its attempt to measure some indicators of quality of life.

What economists know how to measure is interesting. But it’s not exhaustive. Real estate prices can provide some sort of measure of quality-of-life as evaluated by people with money. But of course someone looking for housing wants to know where to find high quality of life relative to cost.

Even if we knew – which we don’t – what places are good places to live, we would still need to know what makes them good places to live, and in particular whether there are characteristics alterable by policy that would improve quality of life.

Measures of social capital – both as an individual asset and as a neighborhood characteristic – have a great deal to tell us, if we learn to measure them properly. And it’s not the case that all neighborhoods at the same level of housing cost have similar connectedness; in particular, high-priced suburbs and exurbs may do very poorly on that measure. Matt is right to ask whether we can find measures of social capital that in fact predict, e.g., mutual aid in disasters. But I don’t see how we can answer that question without trying. Surely measuring rents doesn’t get us anywhere at all.

This seems to me a clear case of cursing the darkness and making fun of people trying to light candles. And I suspect the RAND “fat cat consultants” Matt sneers at aren’t paid as well as either of us is.

Of course Matt is entitled to his opinion. However, as someone who often confronts distrust of economic methods as a problem, I wish he’d do less to foster it. Not all of us trained in the Dismal Science insist on knowing the price of everything and the value of nothing, or on the related fallacy of assuming that price and value are identical concepts.